Railways to balance profitability, welfare

July 09, 2014 - 12:33:02 am

New Delhi: Bullet trains are set to become a reality in India with the first service between Mumbai and Ahmedabad as Prime Minister Narendra Modi’s government sought to run Indian Railways — one of the world’s largest — like a “commercial enterprise but serve like a welfare organisation”.

In the Railway Budget presented to parliament yesterday, Railway Minister D V Sadananda (pictured) Gowda unveiled many new measures to make Indian Railways, which runs about 20,000 trains and ferries 23 million passengers daily, a modern, efficient and commercially viable utility.

He presented proposals, subject to parliamentary approval, for introduction of 58 new trains, paperless office in five years, digital reservation charts, wi-fi in select stations and trains, wake-up call for passengers, separate freight terminals, office-on-wheels for business travellers, more money for cleanliness and safety, food courts at stations, expansion of rail tourism and better connectivity in hilly areas and northeastern states.

He also promised a diamond quadrilateral project of high-speed rail connectivity between the four metros.

He said some identified stations will be developed like modern airports.

Having already hiked passenger fares by 14.2 percent and the freight carriage charges by 6.5 percent, which is expected to fetch additional revenue of Rs80bn, Gowda focused on ways to earn from other sources, such as allowing foreign equity in areas excluding operations, as also public-private partnerships.

Details, he said, would be worked out. Gowda also made it clear that commercial viability cannot be sidestepped.

“An organisation of this magnitude vested with varied responsibilities, is expected to earn like a commercial enterprise but serve like a welfare organisation. These two objectives are like the two rails of the railway track, which travel together but never meet,” he said in his hour-long speech.

Prime Minister Modi was quick to react. “The Railway Budget keeps in mind the development of India. We can see the great use of technology also,” he tweeted, adding: “This budget strengthens institutional mechanism. It focuses on transparency and integrity.”

India Inc. largely welcomed the budget, saying it is reform oriented and opens up vast opportunities for the public-private partnership in a whole gamut of areas, including cleanliness, upkeep of major stations like the airports, and IT infrastructure. The industry bodies also lauded the government’s promise of encouraging domestic as well as foreign investments in the sector.

However, the stock markets reacted negatively with benchmark Sensex plunging by nearly two percent. Railway-related stocks tumbled on lower than expected increase in plan outlay. Texmaco Rail & Engineering slumped by 20 percent. Most other scrips fell at least five percent.

Gowda pegged the total planned outlay for fiscal 2014-15 at Rs654.45bn, which is just 1.8 percent higher than Rs.64.30bn announced by his predecessor in the interim budget presented in February.

Ranked among the world’s top five, the Indian railroad network ferries 23 million people and 2.65 million tonnes of goods daily, or 1.1 billion tonnes annually, from 7,172 stations on 12,617 passenger and 7,421 freight trains over more than 64,000 route km.

With a network stretching from Baramulla in Jammu and Kashmir in the foothills of the Himalayas to the southern tip of Kanyakumari in Tamil Nadu, the Indian Railways is also among the largest employers with an estimated 1.4 million people on its rolls.

“The Indian Railways will improve system capabilities in e-ticketing to support 7,200 tickets per minute as against 2,000 tickets and allow 120,000 simultaneous users at any point,” the minister said, adding that coin-operated vending machines will also be launched.